With the outbreak of COVID-19 across and continuously growing in India, which forced the Indian Government to announce a ‘Lockdown’ for 21 days starting from 00:00 Hours of March 25, 2020. This Lockdown will definitely disrupt the businesses activities of all sectors as the Nation comes to pause.

By understanding the disruption of the business activities, the Government of India has announced certain relaxations with relation to the statutory compliances under various laws, which will help the business organizations and people in India to focus on necessary measures to address the threat that is COVID-19.

This article covers the relaxations provided by Goods and Services Tax [GST], Income Tax, the Ministry of Corporate Affairs [MCA]the Securities and Exchange Board of India [SEBI] & Reserve Bank of India [RBI].

I. GOODS AND SERVICES TAX

1. Relaxation in the filing of GSTR 3B returns for the month of February 2020, March 2020 and April 2020

Particulars Tax Period Relaxation
If aggregate turnover during the preceding financial year is more than 5 crores February 2020

March 2020

April 2020

20th of the Next Month

(Meaning the due dates remain the same).

  • However, the rate of interest will be Nil for first 15 days after the due date and thereafter it will be 9% p.a. if the return is furnished on or before 24th day of June 2020.(If the tax payer does not furnish his return by 24th June 2020 then interest will be at 18% p.a.)
  • No late fee if GSTR3B is furnished by 24th June 2020
If aggregate turnover during the preceding financial year is more than 1.5 crores but up to 5 crores February 2020

March 2020

29th June 2020 without interest and late fee
April 2020 30th June 2020 without interest and late fee
If aggregate turnover during the preceding financial year is up to 1.5 crores February 2020 30th June 2020 without interest and late fee
March 2020 03rd July 2020 without interest and late fee
April 2020 06th July 2020 without interest and late fee

2. Extension in the GSTR3B due dates for the month of May 

SI.No. Particulars Due Date
1 Aggregate turnover more than 5 crore in the previous financial year 27th June 2020
2 If the Aggregate turnover is upto Rs.5 crores in the previous financial year -Due dates are based on states/UT as follows:
22 States/Union Territories

Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha or the Union territories of Jammu and Kashmir, Ladakh, Chandigarh and Delhi

14th July 2020
15 States/Union Territories

Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana or Andhra Pradesh or the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands and Lakshadweep

12th July 2020

3. Relaxation in the filing of Form GSTR 1 

SI.No. Tax Period Due Date
1 February 2020 11th March 2020 (No due date extension)
2 March 2020

(Includes GSTR1 Quarter Ending March 2020)

April 2020

May 2020

30th June 2020 without late fee

4. Relaxations under composition scheme

  • A regular taxpayer can opt for composition scheme for the F.Y.2020-21 on or before 30thJune 2020
  • CMP-08 for the quarter ended 31st March 2020 can be furnished by 07thJuly 2020
  • GSTR-4 for the financial year 2019-20 can be furnished by 15th July 2020

5. Availment of ITC as per Rule 36(4) shall be calculated cumulatively for the month of February, March, April, May, June, July, August,2020 and the return in Form GSTR 3B for the month of September 2020 shall be furnished with the cumulative adjustment of ITC as per the Rule 36(4) for the said months

[Rule 36 (4) -Input tax credit to be availed by a registered person in respect of invoices or debit notes, the details of which have not been uploaded by the suppliers in the GSTR2A of the recipient, shall not exceed 10 per cent. of the eligible credit available in respect of invoices or debit notes the details of which have been uploaded by the suppliers in the GSTR2A of the recipient]

6. where an e-way bill has been generated under rule 138 of the Central Goods and Services Tax Rules, 2017 and its period of validity expires during the period 20th day of March, 2020 to 15thday of April, 2020, the validity period of such e-way bill shall be deemed to have been extended till the 30th day of April, 2020.

7. Any other compliance under the GST law where the time limit is expiring between 20th March 2020 to 29th June 2020 shall be extended to 30th June 2020 subject to certain exception specified in Notification No.35/2020.

 II. INCOME TAX

1. Extension of last date of filing of original as well as revised income-tax returns for the FY 2018-19 (AY 2019-20) to 30th June, 2020.

2. Extension of Aadhaar-PAN linking date to 30th June, 2020.

3. The date for making various investment/payment for claiming deduction under Chapter-VIA-B of IT Act which includes Section 80C (LIC, PPF, NSC etc.), 80D (Mediclaim), 80G (Donations), etc. has been extended to 30th June, 2020. Hence the investment/payment can be made up to 30.06.2020 for claiming the deduction under these sections for FY 2019-20.

4. The date for making investment/construction/purchase for claiming roll over benefit/deduction in respect of capital gains under sections 54 to 54GB of the IT Act has also been extended to 30th June 2020. Therefore, the investment/ construction/ purchase made up to 30.06.2020 shall be eligible for claiming deduction from capital gains arising during FY 2019-20.

5. The date for commencement of operation for the SEZ units for claiming deduction under deduction 10AA of the IT Act has also extended to 30.06.2020 for the units which received necessary approval by 31.03.2020.

6. The date for passing of order or issuance of notice by the authorities under various direct taxes& Benami Law has also been extended to 30.06.2020.

7. It has provided that reduced rate of interest of 9% shall be charged for non-payment of Income-tax (e.g. advance tax, TDS, TCS) Equalization Levy, Securities Transaction Tax (STT), Commodities Transaction Tax (CTT) which are due for payment from 20.03.2020 to 29.06.2020 if they are paid by 30.06.2020. Further, no penalty/ prosecution shall be initiated for these non-payments.

8. Under Vivad se Vishwas Scheme, the date has also been extended up to 30.06.2020. Hence, declaration and payment under the Scheme can be made up to 30.06.2020 without additional payment.

9. A special fund “Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES FUND)” has been set up for providing relief to the persons affected from the outbreak of Corona virus. The Ordinance also amended the provisions of the Income-tax Act to provide the same tax treatment to PM CARES Fund as available to Prime Minister National Relief Fund. Therefore, the donation made to the PM CARES Fund shall be eligible for 100% deduction under section 80G of the IT Act. Further, the limit on deduction of 10% of gross income shall also not be applicable for donation made to PM CARES Fund.

As the date for claiming deduction u/s 80G under IT Act has been extended up to 30.06.2020, the donation made up to 30.06.2020 shall also be eligible for deduction from income of FY 2019-20. Hence, any person including corporate paying concessional tax on income of FY 2020-21 under new regime can make donation to PM CARES Fund up to 30.06.2020 and can claim deduction u/s 80G against income of FY 2019-20 and shall also not lose his eligibility to pay tax in concessional taxation regime for income of FY 2020-21.

III. MINISTRY OF CORPORATE AFFAIRS (MCA)

PROVISIONS RELAXATIONS
1.    Extension of time interval between two Consecutive Board Meetings.
  • As per Section 173 of the Companies Act, 2013, Company shall hold atleast 4 Board meetings every year with a maximum gap of 120 days between two consecutive Board meetings.

 

MCA has extended such gap of 120 days by additional 60 days. Therefore, the gap between two consecutive Board meetings can be a maximum of 180 days. It shall be noted that such relaxation to companies is available for the next two quarters i.e. till 30th September, 2020.
2.    Applicability of the Companies (Auditor’s Report) Order, 2020
Earlier, MCA has issued the Companies (Auditor’s Report) Order, 2020 [CARO, 2020] on 25th February, 2020 and was applicable for reporting on financial statements of companies whose financial year commences on or after 1st April, 2019.
  • With a view to reduce the burden on companies & their auditors for the financial year 2019-2020, MCA has postponed the applicability of CARO, 2020 to financial year 2020-21.

 

3.    Meeting of Independent Directors
As per the Schedule IV of the Companies Act, 2013, Independent Directors of the Company shall hold at least one meeting without the attendance of Non-independent directors and members of management.
  • Considering the existing public health situation in India, MCA clarified that if the Independent directors of a company have not been able to hold such meeting, the same shall not be viewed as a violation.

Although, MCA has recommended Independent directors to share their views amongst themselves through telephone or e-mail or any other mode of communication, if they deem it to be necessary.

4.    Extension of due date for deposits into the Repayment Reserve
  • As per Section 73(2)(c) of the Companies Act, 2013, the Companies are required to deposit at least 20% of the amount of its deposits maturing during the following financial year into deposits repayment reserve account on or before 30th April each year. 
MCA has extended the above mentioned due date for deposit into deposit repayment reserve account to 30th June, 2020.
5.    Extension of due date for deposit of debentures
Under Rule 18 of the Companies (Share Capital & Debentures) Rules, 2014 all companies (other than all Indian financial institutions and banking companies) shall on or before 30th April invest or deposit a sum not less than 15% of the amount of their debentures maturing during the year ending on March 31 of the next year. MCA has extended the above mentioned due date of such investments/deposits to 30th June, 2020.
6.    Declaration for commencement of business [e-form INC-20A]
As per Section 10A of the Companies Act, 2013, every company incorporated after the commencement of the Companies (Amendment) Act, 2019 shall file a declaration for commencement of business within 180 days from the date of incorporation of company in e-form INC-20A.
  • In order to reduce the compliance burden on the companies, MCA has allowed additional period of 180 days for the above mentioned compliance.

Thus, companies can now file the declaration for commencement of business in form INC-20A within a period of 360 days from the date of incorporation.

7.    Resident status of Director
As per Section 149 of the Companies Act, 2013, every company shall have at least one director who stays in India for a total period of not less than 182 days during the financial year. MCA has clarified that non-compliance of above mentioned provision of Section 149 of the Companies Act, 2013 shall not be treated as a non-compliance for the financial year 2019-20.
8.    Amendment to the Companies (Meetings of Board and its Powers) Rules, 2014
MCA through it notification dated 19th March, 2020, has amended the Companies (Meetings of Board and its Powers) Rules, 2014 and allowed the companies to hold the board meetings through video conferencing or other audio visual means for the matters which were not allowed earlier under Rule 4 of the Companies (Meetings of Board and its Power) Rules, 2014.
  • Due to such amendment, now Companies can hold the board meetings through video conferencing or other audio visual means for the following matters also;

– Approval of the Annual Financial Statements;

– Approval of the Board’s Report;

–  Approval of the Prospectus;

– Audit Committee Meetings for consideration of Financial Statement including Consolidated Financial Statement if any, to be approved by the board and

– Approval of the matter relating to amalgamation, merger, demerger, acquisition and takeover.

It is important to note that the validity of such amendment is only for the period commencing of the Companies (Meetings of Board and its Powers) Amendment Rules, 2020 and ending on 30th June, 2020.

9.    No Additional Fees
  • MCA has introduced moratorium period commencing from 1st April, 2020 to 30th September, 2020. During such moratorium period, MCA will not charge any additional fees for any documents, return, statement etc. which are required to be filed in the MCA 21 registry, irrespective of its due date.

The relaxations are also aimed at providing defaulting companies with an opportunity to restart their businesses by filing pending documents with no penalty for delay.

IV. Securities and Exchange Board of India [SEBI]

♦ Relaxations under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:

SEBI through it Circulars dated 19th March, 2020, 23rd March, 2020 & 26th March, 2020 has granted the following relaxations from compliance stipulations:

A. Extension of timeline for filings:

Sr. No. Regulation associated filing Relaxation w.r.t. the quarter/ financial year ending 31st March, 2020
Due date Extended date Period of relax-ation
1. Regulation 7(3) relating to compliance certificate on share transfer facility; April 30,2020 May 31,2020 1 Month
2. Regulation 13(3) relating to Statement of Investor complaints April 21,2020 May 15,2020 3 Weeks (appx.)
3. Regulation 24A read with circular No. CIR/CFD/CMD1/27/201 dated February 8,2019 relating to Secretarial Compliance Report May 30,2020 June 30,2020 1 Month
4. Regulation 27(2) relating to Corporate Governance Report April 15,2020 May 15,2020 1 Month
5. Regulation 31 relating to Shareholding Pattern April 21,2020 May 15,2020 3 Weeks (appx.)
6. Regulation 33 relating to Financial Results May 15,2020

[Due within 45 days from the end of the Quarter for quarterly results]

June 30,2020 45 Days
May 30,2020

[Due within 60 days from the end of Financial Year for Annual Financial Results]

June 30,2020 1 Month
7. Regulation 40(9) relating to Certificate from Practicing Company Secretary on timely issue of share certificates April 30, 2020 May 31, 2020 1 Month
8. Regulation 44(5) relating to holding of AGM by top 100 listed entities by market capitalization for FY 19-20 August 31, 2020 September 30, 2020 1 Month
Non-Convertible Debentures (NCDs) / Non-Convertible Redeemable Preference Shares (NCRPS)
1. Regulation 52 (1) and (2) relating to Financial Results May 15, 2020

[Due within 45 days from the end of the Half Year]

June 30, 2020 45 Days
May 30, 2020

[Due within 60 days from the end of Financial Year for Annual Financial Results]

June 30, 2020 30 Days
2. Common obligations prescribed under Chapter-III of SEBI (LODR) Regulations, 2015 Timelines as prescribed in SEBI Circular No. SEBI/HO/CD/CMD1/CIR/P/2020/38 dated March 19, 2020
Commercial Papers (CPs)
1. Financial Results May 15, 2020

[Due within 45 days from the end of the Half Year]

June 30, 2020 45 Days
May 30, 2020

[Due within 60 days from the end of Financial Year for Annual Financial Results]

June 30, 2020 30 Days
1. Large Corporate – Initial Disclosure and Annual Disclosure (SEBI Circular No. HO/DDHS/CIR/P/2018/144 dated November 26, 2018) April 30, 2020

[Initial Disclosure – within 30 days from the beginning of Financial year]

June 30, 2020 60 Days
May 15, 2020

[Annual Disclosure – within 45 days from the end of Financial year]

June 30, 2020 45 Days

B. Relaxation of time gap between two Board meetings / Audit Committee meetings:

Sr. No. Regulatory provision Relaxation
1. Regulation 17(2): The board of directors shall meet at least four times a year, with a maximum time gap of one hundred and twenty days between any two meetings. The Board of Directors and Audit Committee of the listed entity are exempted from observing the maximum stipulated time gap between two meetings for the meetings held or proposed to be held between the period December 1, 2019 and June 30, 2020.

However the Board of Directors / Audit Committee shall ensure that they meet at least four times a year, as stipulated under regulations 17(2) and 18(2)(a) of the SEBI (LODR) Regulations, 2015.

2. Regulation 18(2)(a): The audit committee shall meet at least four times in a year and not more than one hundred and twenty days shall elapse between two meetings.

C. Conduct of Committee meetings – Nomination and Remuneration Committee, Stakeholders Relationship Committee and Risk Management Committee:

Sr. No. Regulation Requirement Due date Extended date Period of relaxation
1. Regulation 19(3A) The Nomination and Remuneration Committee shall meetat least once in a year. March 31, 2020 June 30, 2020 3 Months
2. Regulation 20(3A) The Stakeholders Relationship Committee shall meetat least once in a year.
3. Regulation 21(3A) The Risk Management Committee shall meetat least once in a year.

D. Exemption for publication of advertisements in the newspapers:

  • Regulation 47 of the SEBI (LODR) Regulations, 2015 requires publishing, in the newspapers, information such as notice of the Board Meeting, financial results as specified in Regulation 33 of the SEBI (LODR) Regulations, 2015 etc.
  • Due to the spread of the Corona Virus, some of the newspapers are not bringing their print versions for a limited period where some of the newspapers that are still printing are not accepting a ‘e-copy’ of the information to be published which acts as a challenge in ensuring compliance with Regulation 47 of the SEBI (LODR) Regulations, 2015.
  • Considering such circumstances, SEBI has granted exemption for publication of advertisements in newspapers as required under Regulation 47 of the SEBI (LODR) Regulations, 2015 for all events scheduled till May 15, 2020.

♦ Relaxations under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011:

Regulations Relaxation
Regulations 30(1), 30

Such Regulations r(2) and 31(4): equire the shareholders to compile, collate, and disseminate information of their consolidated shareholding as on March 31, 2020, to the company and the stock exchanges within seven working days from the end of the financial year.Therefore, the same are required to be filed by April 15, 2020.

SEBI has extended the due date of filing disclosures, in terms of Regulations 30(1), 30(2) and 31(4) for the financial year ending March 31, 2020 to June 01, 2020.

♦ Relaxations under other SEBI Regulations and/or SEBI Circulars:

A. Extension of timeline for issuance and filings for issuers who have listed /propose to list their Non-Convertible Debentures (NCDs) / Non-Convertible Redeemable Preference Shares (NCRPS)/ Commercial Paper(s):

[SEBI Circular No. SEBI/HO/DDHS/ON/P/2020/41 dated March 23, 2020]

Sr. No. Earlier Now
1. SEBI vide its circular no. CIR/IMD/DF/18/2013 dated October 29, 2013 provides that companies proposing to make public issue of debt securities are required to give the audited financials in the offer document, which are not older than 6 months from the date of prospectus. Now, the compliant listed entities are allowed to disclose unaudited financials with limited review report, instead of audited financials, for the stub period.
2. Similarly, for issuers, which intend to list their CPs, SEBI has vide circular SEBI/HO/DDHS/CIR/P/2019/115 dated October 22, 2019 and SEBI/HO/DDHS/CIR/P/2019/167 dated December 24, 2019 provided that issuer has to submit its latest audited financials which should not be older than six month. Now, the same are allowed to file unaudited financial with limited review for the stub period in the current financial year.

B. Relaxation in timelines to enable issuers who intend/propose to list their NCD/NCRPS/CPs:

[SEBI Circular No. SEBI/HO/DDHS/ON/P/2020/41 dated March 23, 2020]

Particulars Available Audited financials Date for issuance Extended date for issuance Period of relaxation
Cutoff date forissuance of NCDs/NCRPS/CPs As on September 30, 2019 On or before March 31, 2020 On or before May 31, 2020 60 Days

C. Extension of timeline for filings prescribed for Issuers of Municipal Debt Securities:

[SEBI Circular No. SEBI/HO/DDHS/ON/P/2020/41 dated March 23, 2020]

Sr. No. Regulation and associated filing Relaxation w.r.t. the Half Year / Financial Year ending March 31, 2020
Due Date Extended date Period of relaxation
1. Investor Grievance Report as per Municipal Bond within 30 working days from end of Half Year June 30, 2020 45 Days
2. Financial Results May 30, 2020 June 30, 2020 30 Days
3. Accounts maintained by Issuers under ILDM Regulations May 15, 2020 June 30, 2020 45 Days

D. Relaxation from compliance to REITs and InvITs:

[SEBI Circular No. SEBI/HO/DDHS/CIR/P/2020/42 dated March 23, 2020]

SEBI has extended the due date for regulatory filings and compliances for REIT and InvIT for the period ending March 31, 2020 by one month over and above the timelines, prescribed under SEBI (Infrastructure Investment Trusts) Regulations, 2014 (InvIT Regulations) and SEBI (Real estate Investment Trusts) Regulations, 2014 (REIT Regulations) and circulars issued thereunder.

E. Relaxation in compliance with requirements pertaining to Mutual Funds:

[SEBI Circular No. SEBI/HO/IMD/DF3/CIR/P/2020/47 dated March 23, 2020]

SEBI has granted the following relaxations specified in SEBI (Mutual Funds) Regulations, 1996 and circulars issued thereunder:

  • All schemes (NFO) where observation letter was issued by SEBI and yet to be launched shall have a validity period of one year from the date of SEBI letter. All new schemes (NFO) where final observation letter will be issued shall have validity period of one year from the date of SEBI letter.
  • Extension of timelines for certain disclosures:
Sr. No. Regulation / Circular and associated disclosure Timelines
Due Date Extended Date
1. Half yearly disclosures of unaudited financial results as required under Regulation 59 of SEBI (Mutual Funds)Regulations, 1996 April 30,2020 May 31,2020
2. Disclosure of commission paid to distributors as required underPoint 2 (a) of SEBI circular No.SEBI/HO/IMD/DF2/CIR/P/2016/42dated March 18, 2016 April 10,2020 May 10,2020
3. Yearly disclosure of invest or complaints with respect to Mutual Funds as required under Point 4 (b) of SEBI circular No.Cir / IMD / DF / 2 / 2010 dated May 13, 2010 May 31,2020 June 30,2020
  • Extension of effective date of implementation of certain policy initiatives:
Sr. No. Circular Name Particulars Due Date Exte-nded Date
1. Risk management frame work for liquid and overnight funds and norms governing investment in short term deposits dated September 20, 2019 Liquid funds shall hold at least 20%of its net assets in liquid assets. April 1, 2020 May 1,2020
2. Review of investment norms for mutual funds for investment in Debt and Money Market Instruments dated October 1,2019 Existing open ended mutual fund schemes shall comply with the revised limits for sector exposure. April 1, 2020 May 1,2020
3. Review of investment norms for mutual funds for investment in Debt and Money Market Instruments dated October 1,2019 Maximum investment in unlisted NCDs as% of the debt portfolio of the scheme. 15% – March 31, 2020 15% – April 30, 2020
4. Valuation of money market an debt securities dated September 24, 2019 Amortization based valuation shall be dispensed with and irrespective of residual maturity,all money market and debt securities shall be valued in terms of paragraph 1.1.2.2 of the Circular April 1, 2020 May 1,2020
  • Further, the access control presently exercised in the AMC’s dealing room including call recording of deals is temporarily relaxed subject to checks and balances including electronic confirmation by way of email or other system having audit trail are in place.

F. Relaxation on Standard Operating Procedure:

[SEBI Circular No. SEBI/HO/CFD/CMD1/CIR/P/2020/48 dated March 26, 2020]

  • SEBI vide circular no. SEBI/HO/CFD/CMD/CIR/P/2020/12 dated January 22, 2020 issued the Standard Operating Procedure (SoP) on imposition of fines and other enforcement actions for non-compliances with provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the effective date of the same is for compliance periods ending on or after March 31, 2020.
  • SEBI has postponed the effective date of such circular, therefore now such circular shall come into force with effect from compliance periods ending on or after June 30, 2020.However, it shall be noted that the SoP circular dated May 03, 2018 would be applicable till such date.

G.  Relaxation in compliance with requirements pertaining to Portfolio Managers:

[SEBI Circular No. SEBI/HO/IMD/DF1/CIR/P/2020/57 dated March 30, 2020]

    • SEBI has extended the timelines for the following, by two months;

√ Monthly reporting to SEBI by Portfolio Managers for the periods ending March 31, 2020 and April 30, 2020.

√ Applicability of SEBI Circular SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020 on ‘Guidelines for Portfolio Managers’.

H. Relaxation in compliance with requirements pertaining to AIFs and VCFs:

[SEBI Circular No. SEBI/HO/IMD/DF1/CIR/P/2020/58 dated March 30, 2020]

SEBI has extended the due date for regulatory filings for AIFs and VCFs for the periods ending March 31, 2020 and April 30, 2020 by two months, over and above the timelines prescribed under SEBI (Alternative Investment Funds) Regulations, 2012 and circulars issued thereunder.

 V. RESERVE BANK OF INDIA

COVID-19 Regulatory Package (Revised) DOR.No.BP.BC.47/21.04.048/2019-20 dated March 27, 2020

Rescheduling of Payments – Term Loans and Working Capital Facilities

  • In respect of all term loans (including agricultural term loans, retail and crop loans), all commercial banks, co-operative banks, NBFCs etc are permitted to grant a moratorium of three months on payment of all instalments falling due between March 1, 2020 and May 31, 2020.
  • The repayment schedule for such loans as also the residual tenor, will be shifted across the board by three months after the moratorium period.
  • Interest shall continue to accrue on the outstanding portion of the term loans during the moratorium period.
  • Instalments will include the following payments falling due from March 1, 2020 to May 31, 2020: (i) principal and/or interest components; (ii) bullet repayments; (iii) Equated Monthly instalments; (iv) credit card dues.
  • In respect of working capital facilities (CC/OD), to defer the recovery of interest applied in respect of all such facilities during the period from March 1, 2020 upto May 31, 2020.
  • The accumulated accrued interest shall be recovered immediately after the completion of this period.

Easing of Working Capital Financing

  • In respect of working capital facilities CC/OD to borrowers facing stress on account of the economic fallout of the pandemic, lending institutions may recalculate the ‘drawing power’ by reducing the margins and/or by reassessing the working capital cycle.
  • This relief shall be available in respect of all such changes effected up to May 31, 2020.

Extension of realisation period of export proceeds [ RBI Press release dated April 01, 2020]

  • Presently value of the goods or software exports made by the exporters is required to be realized fully and repatriated to the country within a period of 9 months from the date of exports.
  • The time period for realization and repatriation of export proceeds for exports made up to or on July 31, 2020, has been extended to 15 months from the date of export.

Deferment of Implementation of Net Stable Funding Ratio (NSFR) [ RBI Press release dated March 27, 2020]

  • The Basel Committee on Banking Supervision (BCBS) had introduced the Net Stable Funding Ratio (NSFR) which reduces funding risk by requiring banks to fund their activities with sufficiently stable sources of funding over a time horizon of a year in order to mitigate the risk of future funding stress.
  • As per the prescribed timeline, banks in India were required to maintain NSFR of 100 per cent from April 1, 2020.
  • It has now been decided to defer the implementation of NSFR by six months from April 1, 2020 to October 1, 2020.

Thus, in the current nationwide lockdown scenario, the relaxations which are granted by various regulators from a few of the compliance requirements will definitely ease the compliances requirements for a few months.

Disclaimer: The Contents of the document are solely for information purpose. It does not constitute professional advice or a formal recommendation. Due care has been taken in preparing this document, the existence of mistakes and omissions herein is not ruled out. Comments on misinterpretation and mistakes are wholeheartedly invited.

Author – CA Chelladurai M., a practicing Chartered Accountant from Thane, Mumbai and can be reached at Email : durai_123@hotmail.com and Phone : 9892697493

CA Chelladurai M., has more than 8 years of professional experience in taxation, auditing, accounting, outsourcing and consulting profession.

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